I’m not sure why we spend so much time on a rather silly semantic argument. Is Santa Claus “real”? What about Falstaff or Mickey Mouse? True love and patriotism? The future and the past? They do not occupy physical space, and yet we are naming something that exists in our minds, that has real properties by common understanding. It is in that sense that any accounting standard exists, and in that sense, the Social Security Trust Fund is as real as next week.

A new bill has been sponsored by Assemblyperson Wayne P. DeAngelo (D) to implement a crackdown.

A new bill A2204 is before the Assembly, having been sponsored by Assemblyperson Wayne P. DeAngelo (D-Mercer/Middlesex) with the purpose of targeting the residents of the state who are purchasing their auto insurance in other states through fraudulent means, despite the fact that they reside primarily within New Jersey or the insured vehicle is primarily kept there.

This is considered to be a form of fraud that is becoming quite costly within the state.

According to DeAngelo “Insurance fraud is not only wrong, but it costs honest drivers money through higher premiums.” He went on to explain that “Weve made a lot of progress in controlling auto insurance rates, but we still have a long way to go and cracking down on fraud needs to be a big part of that continuing effort.”

DeAngelo dislikes that it is not currently possible to prosecute this form of auto insurance evasion.

In The Reshaping of Auto Insurance, published earlier this week at IT, the authors disputed what they characterized as doomsday predictions about drops in auto insurance premium. Its hard to avoid the conclusion that they had in mind the May 2012 report A Scenario: The End of Auto Insurance. What Happens When There Are Almost No Accidents, by Donald Light, director of Celents Americas property/casualty practice. Whatever the case, Light has shared with IT some relevant counterpoints.

[For ITs original take on Celents study, see Prepare for Deep Auto Insurance Premium Drop Scenario, Celent Report Advises.]

The authors of the The Reshaping of Auto Insurance, Marik Brockman and Anand Rao of PwC, insisted that despite the emergence of telematics and other technologies, such as automatic braking, location awareness, vehicle-to-vehicle (V2V) communications, improved stability control for large commercial vehicles, and driverless cars, the auto insurance business would continue more or less as normal for the foreseeable future. Several of these technologies have been around for some time, and premium has held steady, they noted. Furthermore, they wrote:

While telematics have the potential to reduce premiums for some drivers early adopters in particular are likely to be less risky customers and receive the greatest discounts they actually may help the industry price policies more effectively overall.

Moreover, a series of cost factors and adoption resistance will continue to buoy premiums: high repair costs for increasingly complex vehicles, increasing medical costs for injuries, more frequent and devastating natural disasters, consumer advocates resisting potential privacy risks, and electronic malfunctions that fail to reduce accidents. Moreover, customers take time to adopt new technologies as they evolve due to lack of total understanding, high purchase costs, or the natural inertia of wanting to fully utilize durable products for much of their lengthy lifecycle. In fact, the age of American cars and trucks on the road has reached a record high of 10.8 years.

Both the PwC authors and Light acknowledge the possibility of significant auto premium decrease of some degree at some time in the future. Light faults the PwC report for considering only on-board technologies. By doing so, it ignores the potential impact of automated traffic law enforcement — eg speeding and red light cameras, Light observes. Depending on the political will — and desire for revenue — of state and local governments, these technologies may have a quicker and more dramatic impact than onboard technologies.

Governments could also mandate V2V communications as a way of increasing the carry capacity of roadways and avoiding costly construction. They might push adoption by characterizing V2V as a green technology with positive environmental effects.

Light implies that the concept of risk shifting featured in the PwC piece may support his contentions about the possibility of lower premiums. If and when liability for many accidents shifts to the manufacturers of the automobiles — and/or the on-board equipment— it is likely that the frequency of accidents will be significantly lower, leading to lower losses, and lower premiums for auto insurers, he comments. So change is coming for auto insurers in terms of business and operating models. The big question is how quickly.

[For the full text of the PwC-authored article, see The Reshaping of Auto Insurance.]

The insurance industry is welcoming new regulations proposed by the province to help firms fight organized fraud estimated to be a $1.6-billion business.
The proposed changes are largely about insurers working with claimants to ensure organized rackets, including unscrupulous medical providers, do not fly under the radar, Insurance Bureau of Canadas vice-president of investigative services Rick Dubin said.
What we are seeing in these clinics often is you can have legitimate individuals going for only one treatment and they may not go for more treatments, but (the clinics) are still billing … or overbilling, he said.
In a bid to stem this crime and other organized fraud, insurers may start providing customers with more precise details on why they deny claims, give customers bi-monthly statements of what is paid on their behalf
and may even start requiring claimants to confirm attendance at health clinics, Mr. Dubin said.
Another proposal may make providers subject to sanctions for overcharging insurers for goods and services and ban them from asking customers to sign blank claim forms.
The concern here is with whats going on in medical clinics and staged collisions, he added.
And while John Bordignon of Auroras State Farm Insurance couldnt promise the proposals would lower insurance rates, which have ballooned 11.4 per cent during the past seven years, he said they would help keep costs down.
What this will do is help honest insurance customers, he said. They wont have to pay for those that cheat the system.
In the past two years, York Regional Police has investigated staged crash rings, including one responsible for an October 2011 crash in Georgina and another in Vaughan in 2009.
In November, York police announced the arrest of 14 people including seven York residents after linking them to what it believes was an organized crime group that may have been responsible for as much as $50 million in insurance fraud.
Last year, Toronto Police announced 37 people, including five Markham residents, were charged after a three-year probe exposed what is believed were staged vehicle collisions and phoney insurance claims issued by physiotherapy clinics for insurance windfalls.
In the wake of that probe, police and the insurance industry announced they were eyeing new tactics to stem the tide of societal costs associated with these crimes.

Wed asked readers to tell us which television ads give them a headache. Here’s what some of you said:

Those commercials from lawyers fishing for customers who have various medical conditions.

Also, all auto insurance companies, especially that insurance company that shows all the shopping carts being dumped on two identical cars. I don’t hate anyone, but that guy is near the top of my list of people who I’d hate if I were ever to hate anyone. He would be at the top of the list if it weren’t for Flo.

Michigan officials warn people to be aware of an auto insurance scam going on in the state.

The Office of Financial and Insurance Regulation (OFIR) warns drivers that they may have unknowingly purchased fraudulent automobile insurance certificates from an unlicensed individual reportedly issued through Tennessee Christian Motorist Aid.

Drivers are urged to contact OFIR toll-free at 877-999-6442 if they believe they may have bought a fraudulent policy from Graber. OFIR can assist consumers in determining whether they have proper auto coverage.

All insurance producers (agents) and agencies in Michigan are required to be licensed to sell insurance and all insurance companies must be authorized to write in Michigan. Consumers are advised to check to see if an insurance agent, agency and insurance company are properly licensed to do business in Michigan by visiting: www.michigan.gov/lara/0,1607,7-154-10555_13251_13262—,00.html

The no-fault system offers medical coverage, regardless of who is at fault in an accident, as well as unlimited catastrophic injury coverage paid through the MCCA fee.

State Sen. Joe Hune, R-Hamburg Township, said personal injury protection and catastrophic coverage are central to high auto rates in Michigan.

He supported a House bill last year that, if passed, would have given customers a choice of auto medical coverage ranging from $500,000 up to $5 million.

Hunes stance on catastrophic coverage, in particular, has been met with protest by many who rely on lifetime coverage due to extensive auto-related injuries, as well as many in the medical community.

My prayers were answered. Its been a long time coming, Hune said after Snyders address.

Its absolutely the right thing to do, he added.

Hune said he will introduce no-fault insurance reform legislation after his bills restructuring Blue Cross Blue Shield of Michigan are passed.

Hune said his new bills will include measures to lower no-fault medical costs and to allow motorists to choose levels of medical coverage on their plans.

Weve got to have some kind of cost containment, he said.

The Genoa Township-based Brain Injury Association of Michigan said it hopes for a dialogue with lawmakers on the issue but that its main concern remains unlimited catastrophic coverage that many of its clients rely on, said Tom Constand, spokesman for the Brain Injury Association of Michigan.

Offering motorists coverage options on catastrophic care sounds like a money-saver until someone has a life-changing auto accident, Constand said.

You say that until youre on the other side of the equation, and something happens and you need that care, he said.

Thats our single biggest issue because of who we represent. Its not an understatement to say it affects their very lives, Constand added. Whatever changes are made have to be made with that in mind.

Michigan is the only state that provides unlimited no-fault medical benefits on insurance policies.

By the numbers

In his address, Snyder said Michigan has the highest average claim cost at $44,000, with the next two highest-claim states at an average $17,000 and $10,000 per claim.

He said Detroit ranks as the most-expensive city in the country for auto insurance, Novi ranks No. 6 and Muskegon ranks No. 9.

Snyder didnt provide specific ideas to reform the no-fault system and this week wouldnt say whether he would support placing limits on unlimited medical coverage.

His focus is on addressing the no-fault problem in a way that ensures sustainability for the system, lowers medical costs and reduces costs caused by fraud in auto insurance. So well see what the new legislation looks like and if there are any new ideas that can help Michigans overburdened drivers, said Ken Silfven, Snyders spokesman.

Its just too early to commit to any specifics, Silfven added.

Michigan has the highest car insurance rates when compared to income in the country at an average 8 percent of annual Michiganders income, according an ABC News report. The 2012 report was based on data compiled by CarInsuranceQuotes.com.

Michigans average rate in the ABC News report was followed by Louisiana, whose residents pay 5.5 percent of income toward polices; Kentucky, whose residents pay 4.5 percent of income toward polices; and West Virginia, whose residents pay 4.2 percent of income toward polices.

Michigans status as the only state that provides unlimited no-fault medical coverage at least contributes to its high auto insurance rates, John Egan of CarInsuranceQuotes.com told ABC News.

If youre an accident victim, that will pretty much save you from going bankrupt, Egan told ABC News. But opponents of the system say it jacks up the car insurance premiums for everybody. So, youve got two sides of the issue there.

The Michigan Insurance Coalition applauded Snyders call for action, and said no-fault medical coverage, in particular, must be reined in to reduce insurance rates.

We are appreciative and encouraged that the governor recognizes that Michigans no-fault system is a runaway train that needs reform now before it goes off the cliff and future generations of Michigan drivers are left holding the tab, Kurt Gallinger, chairman of the coalition, said in the statement.

Transparency concerns

The MCCA, made up of insurance industry professionals, reimburses companies that provide no-fault insurance for automobiles for each claim paid in excess of $500,000.

It also sets the annual rate Michiganders pay toward catastrophic coverage, currently $175 per vehicle.

The MCCA has never been subject to the state Freedom of Information Act and claims the fund has become unsustainable.

The FOIA exemption has allowed the MCCA to increase its fees without explaining why, the Brain Injury Association of Michigan and Coalition Protecting Auto No-Fault argued in lawsuits.

A December Ingham County Circuit Court ruling found that Michiganders could request MCCA information used to determine the funds solvency via FOIA requests.

Claims of the fund being unsustainable are yet to be proven because information has been exempted from public disclosure for decades, Constand said.

All weve been asking for is the evidence to point that out, Constand said. We remain open to collaborative dialogue and discussion regarding no-fault, but lets make sure its collaborative, and lets make sure its open.

Those opposed to releasing MCCA information said it would require disclosure of private health records to the general public.

She wants to put full coverage on it, but her insurance broker said her insurer wont allow it because of some scratches and dents on the car.

I never had this problem with my insurance company, and Ive fully insured older vehicles. What should she do?

Answer:If your mother wants collision and comprehensive coverage (often referred as full coverage) on her vehicle and her current car insurance company refuses her request, she should comparison shop and purchase her auto insurance policy elsewhere.

Coverage offerings and rates vary greatly from one insurance company to the next, and this allows for motorists to find an affordable auto insurance policy that includes coverages they want. Underwriting rules and guidelines also differ insurer to insurer.

For instance, some car insurance companies limit how old a vehicle they will cover with comprehensive and collision. If your vehicle is beyond their limit, such as 20 years, you will be offered only liability coverages. (See Insure your car from showroom to junkyard)

Some auto insurance providers will offer car owners full coverage if their vehicle has dents and scratches or other minor damage, as long as it is documented and the policyholder understands he or she cannot claim for this pre-existing damage.

Other car insurance carriers will at first refuse your request for comprehensive and collision coverage if your vehicle has existing damage, but will allow you to add full coverage once documentation and an inspection show that necessary repairs were made.

And still other auto insurance companies wont offer you full coverage period if a vehicle has existing coverage, or existing damage that is over a certain monetary amount, such as $500.

When an insurance company wont insure a vehicle due to damage, its not trying to criticize a persons choice in an older car that shows its age. Its a business decision. If the car were in an accident it would be difficult to discern old damage from new, thus causing issues with claims.

There is also the issue of insurance fraud. Dishonest individuals sometimes buy a beat-up older vehicle for a song and then put comprehensive and collision on it and later try to make a claim for pre-existing damage. Fraud like this can end up costing honest auto insurance policyholders, like you and your mother, more in premiums.

By comparison shopping for a full coverage policy with multiple auto insurance companies at once, like CarInsurance.com offers here, your mother should easily be able to find a provider that is pricing competitively for her particular set of rating factors, including her older vehicle.

Id advise your mother to also review Is it time to drop comp and collision to help her decide just how long she needs full coverage on her older vehicle.

HOUSTON — A new study from OnlineAutoInsurance.com (OAI) showing how car insurance prices fluctuate based on gender shows that men in Texas pay more than women for coverage nearly two-thirds of the time and that the average surcharge for being male is around 14 percent.

The analysis was based on 276 sample Texas auto insurance quotes made available by state regulators through HelpInsure.com, an online portal that allows Texas drivers to get premium estimates from top insurers in the state based on generic driver profiles. OAI collected and analyzed premium data for a single Houston driver with good credit and 50/100/50 liability limits. For each insurer, one quote was collected for the male version of this profile, and one was collected for the female version.

Auto insurance customers continue to be pleased with not only with their claims settlement amounts but also with how quickly their claims are being settled.

Also, insurance claims adjusters are doing a better job of speeding up the claims process than repair shops, new research suggests.

Overall, claimant satisfaction increased by six points in the fourth quarter of 2012 to 861 on a 1,000-point scale from the fourth quarter of 2011, according to the latest JD Power and Associates 2013 US Auto Claims Satisfaction Study, Wave 1.

The rise was primarily due to an 11-point increase in settlement satisfaction.

As repairable and total loss claims are being paid faster, overall claimant satisfaction rises, the study says.

The study finds that the average time to pay claimants has decreased to 13.9 days in the fourth quarter of 2012, down from 16.4 days in the same period of 2011. While the average time to pay claimants for a repairable claim (11.8 days) has decreased by 1.3 days from the fourth quarter of 2011, the largest decrease is in the time it takes to pay total-loss claims, down by an average of 5.1 days to 18.5 days.

Regardless of the claim type, the faster the claimant is paid and can move forward with a repair or to replace their vehicle, the more likely they are to be satisfied, said Jeremy Bowler, senior director of the insurance practice at JD Power and Associates. In addition, satisfaction with the claims professional is at an all-time high, indicating that the process is becoming smoother, with more frequent updates throughout contributing to a much more satisfying experience.

Interestingly, while overall claim satisfaction increases and the time it takes to pay claimants decreases, the average cycle time of the vehicle repair increases by 1.2 days to 13.5 days in the fourth quarter of 2012, compared with 12.3 days in the fourth quarter of 2011.

The study measures claimant satisfaction with the claims experience for auto physical damage loss by assessing six stages in the claims process: first notice of loss; claim service interaction; damage appraisal; repair process; rental experience; and settlement.

Satisfaction with the repair process is 862, a decrease of two points from the fourth quarter of 2011. Contributing to lower satisfaction is a decline in the percentage of vehicles being fixed right the first time–89 percent in the fourth quarter of 2012, compared with 91 percent in the fourth quarter of 2011.

While insurers have made significant progress in the past 12 months to improve the efficiency of the claims process, the repair providers have not kept pace, said Bowler. Failure to repair a vehicle correctly is critical to the customer experience as average satisfaction scores tumble over one hundred points for those who had to bring their vehicle back for repeat repairs.

On average, claimants who take their vehicle to a non-direct repair provider wait 16.0 days to get their vehicle back, 2.9 days longer than when they take their vehicle to a direct repair provider (13.1 days, on average). The gap in time between a direct repair provider and non-direct repair provider in the fourth quarter of 2012 has increased from only 1.8 days in the same period in 2011. A direct repair provider is a preferred provider of the insurer.

JD Power said the report is based on responses from more than 3,000 auto insurance customers who settled a claim within the past six months. The study excludes claimants whose vehicle incurred only glass/windshield damage or was stolen, or who only filed roadside assistance claims. Survey data was gathered in December 2012